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value360-2022-year-in-review

03/17/2023

Value360: 2022 year in review

CohnReznick’s Transactions and Turnaround Practice was rebranded Value360 in July 2022 to reinforce the firm’s ability to help clients create value at every point of the business lifecycle. Building on its success in 2021, the practice exceeded $100 million in revenues in 2022 and experienced double-digit organic growth. The team continued to advise clients in many different industries as they sought to execute capital markets transactions, performance improvement activities, and restructuring/bankruptcy initiatives.

With a team nearing 250 members, the practice significantly expanded its leadership ranks with multiple strategic hires in transactions, valuation, project finance and consulting, and restructuring and dispute resolution. In addition, the practice expanded its service offerings to include infrastructure advisory as well as financial modeling and decision analytics.

Practice areas: Key stats

Transaction Advisory Services:

850+ transactions valued at more than $25 billion

Restructuring and Dispute Resolution:

Generated ROI (return on fees) for clients ranging from 2x-44x

Project Finance and Consulting:

Serve majority of syndicators in $22 billion affordable housing financing market

Valuation:

Testified at 39 hearings, in 9 states, representing 18 developers related to our Solar Farm Property Value Impact Studies

Case studies

Project Finance Consulting

North Carolina Mill Rehabilitation Tax Credit (Article 3H) reinstated

Background: After the state legislature in North Carolina re-instated a tax credit statute that had expired, we determined that our clients could benefit significantly from the tax credits.
Our role: Technical subject matter expert/ drafted submission for credits on behalf of the client
Results: After submitting a request for ruling, client received favorable determination from the Department of Revenue and is expecting an additional $3 million of tax equity.

Lisner Louise Dickson Hurt Home operating cost financial model

Background: A not-for-profit operator of an affordable housing facility for seniors needed to reduce its operating costs and sought analysis under different scenarios.
Our role: Created a budget/proforma model to conduct the comparison
Results: Client leveraged our analysis to support a submission to a third-party entity for grant funding. Client was rewarded with a $3.5 million grant from the third party to fund much-needed renovations and capitalize a reserve for services.

RESTRUCTURING AND DISPUTE RESOLUTION (RDR)

Retail chain

Background: A specialty retailer and consumer lender needed guidance on an acquisition which required raising a debt facility to finance the buyout.
Our role: Lead acquisition advisor
Results: Finalized the structure of the sourced capital and connected the buyer with a provider who funded the capital needed to acquire and operate the post-close store. Helped the buyer realize a 30% increase in financial performance through revenue improvements and lean operation initiatives, including beneficial lease modifications.

Beverage distributor

Background: A third-generation, family-owned, beverage distributor with $300 million in revenue had to manage financial distress after leveraging the business to acquire a competitor.
Our role: Performance improvement consultant
Results: Increased EBITDA by 75% and generated a 200% increase in equity value. Improved Q1 cash flow by $650,000 while maintaining a 10% improvement in weekly cash flow through upgraded collections. Reduced inventory investment by 10% and dilution by $700,000 on rising sales. Realized more than $1.3 million in warehouse and delivery cost savings despite increasing volume.

transactions advisory

Private equity majority stake acquisition of privately owned media and entertainment company

Background: A capital provider concentrating on special situations required confirmatory financial due diligence as part of its acquisition process. Areas of focus included:
- Quality and sustainability of earnings (QofE)
- Purchase agreement assistance
- Identification and confirmation of operating trends
- Review of financial and operating environment and controls
- Identification of potential key-risks and areas of improvement
Our role: Financial and tax due diligence advisor
Results: We identified areas of risk and determined/quantified limited exposure. We uncovered areas where the seller/acquired entity could benefit from post-acquisition. The transaction successfully closed.

Acquisition of a durable medical equipment (DME) provider by a strategic client – Buy-side due-diligence

Background: Our client, an in-home medical equipment/supplies provider, required confirmatory financial due diligence that included a billing, coding, and compliance review of the target in connection with an acquisition.
Our role: Financial due diligence and billing, coding and compliance diligence
Results: We identified an overstatement of earnings in the most recent period, resulting in a significant reduction in purchase price. We helped the client identify $1.4 million of vendor synergies that could be achieved on day one post-close.

Valuation Advisory Services

Market studies for the Cesar Chavez Foundation

Background: One of the most prominent affordable housing foundations required market studies for their full affordable housing portfolio.
Our role: Demand analysis assessment
Results: The data we collected allowed the client to assess rents and revise projections for 2023. Overall increase in bottom line allowed for additional resources to be funneled into future.

Solar developer

Background: Two solar developers disagreed about the value of a solar renewable energy credit (SREC) strip for solar projects that were bought and sold. The seller hired us to determine the value.
Our role: Valuation advisor
Results: Our valuation was used to settle the case and confirm $1 million due to our client. Attorneys acknowledged that our expert witness deposition was key the settlement.

Representative transactions

value360 Representative transactions

Subject matter expertise

Contact Claudine Claudine+Cohen Claudine.Cohen@cohnreznick.com

Claudine Cohen
Managing Principal, Value360 Practice
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